Fastmarkets 2026: 3 Themes Shaping Lithium's Next Chapter

ESS: The new pillar driving lithium’s bullish cycle

Another overarching narrative at the 2026 Fastmarkets conference was the uptick in energy storage system (ESS) demand.

Energy storage systems (ESS) have emerged as one of the fastest-growing demand drivers for lithium-ion batteries, reshaping battery chemistry preferences and creating a new source of long-term demand alongside electric vehicles. According to Fastmarket’s Rob Searle, lithium iron phosphate (LFP) batteries now hold "a near-total monopoly" in the ESS market, a position he expects to remain intact over the next decade despite the emergence of alternative chemistries.

Searle said the rapid expansion of grid-scale storage has become a key catalyst for the lithium market's recent recovery, noting that the "bullish run" in ESS demand seen over the past several years has continued through 2026 and is now a major factor behind rising lithium carbonate prices.

In China, policy support has also shifted toward energy storage, with ESS increasingly viewed as a strategic pillar for energy security. Battery manufacturers have responded in kind, with Searle noting that some Chinese ESS producers already have order books extending into the first quarter of 2027.

"China's electric vehicle and ESS market remains the largest and has trended to favour lithium carbonate over hydroxide due to the fact of huge deployment of LFP across both applications," noted Searle, highlighting how China has effectively set the template for emerging markets

Looking ahead, Searle expects ESS to play an even greater role in global battery demand as countries expand renewable power generation, modernize electricity grids and build capacity to support AI data centres.

While electric vehicles remain an important source of lithium consumption, he said ESS has become "part of the story" driving tighter lithium market fundamentals and future supply deficits. Even as sodium-ion batteries gain traction in stationary storage, Searle believes ESS will remain a critical growth engine for lithium over the coming decade, with LFP chemistry continuing to dominate the sector.

Politics, power, and the fight for lithium

Politics, geopolitics and resource nationalism have become as influential to the lithium market as supply and demand fundamentals, with industry leaders arguing that government policy is increasingly shaping investment decisions and supply chain development.

During the "US Midterms and Market Risk: What’s at Stake for Lithium and Critical Minerals" fireside chat, panelists agreed that critical minerals, battery materials, and energy storage will remain strategic priorities regardless of the US midterm election outcomes.

While policy approaches may differ, speakers pointed to growing bipartisan recognition that securing domestic battery supply chains is essential for energy security, AI infrastructure and industrial competitiveness.

Ken Hoffman, founder and CEO of Traubenbach Associates said the industry's greatest need is "stability and consistency in policy," arguing that companies cannot plan long-term investments if government priorities shift every election cycle.

China's dominance also remained central to the discussion. Former US Department of Commerce senior representative Gary Stanley described the relationship between Washington and Beijing as one of "incredible interdependency," while warning that critical minerals have become a key geopolitical lever in trade negotiations.

He went on to note, that traditional free-market approaches alone are unlikely to close the gap with China, suggesting governments may need new public-private financing models to accelerate domestic supply chains.

Rather than focusing solely on new mine development, panelists emphasized the need to expand downstream refining, processing and manufacturing capacity across North America and allied countries.

Permitting reform, targeted incentives and greater policy certainty was also highlighted as essential to unlocking billions of dollars in delayed investment and reducing reliance on Chinese processing capacity.